MARINE CARRIERS CORP. v. FOWLER

October 21, 1969

MARINE CARRIERS CORPORATION, Plaintiff,
v.
Henry H. FOWLER, individually, and as Secretary of the Treasury, Lester D. Johnson, individually, and as Commissioner of Customs, Alan Stephenson Boyd, individually, and as Secretary of Department of Transportation, Willard J. Smith, individually, and as Commandant of U.S. Coast Guard, and the Bureau of Customs, Defendants

Tenney, District Judge.

The opinion of the court was delivered by: TENNEY

MEMORANDUM

TENNEY, District Judge.

Plaintiff, a Delaware corporation, by amended complaint filed September 11, 1968 sought declaratory judgment pursuant to 28 U.S.C. § 2201, declaring it entitled to enroll its vessel, the "OBSERVER", in coastwise trade, and an injunction compelling defendants to so enroll it. Plaintiff, contending that there exists no genuine issue as to any material fact, has moved pursuant to Fed.R.Civ.P. 56 for an order granting summary judgment in its favor for the relief requested in its amended complaint. In opposition to this motion, defendants have similarly moved for summary judgment.

The complex but undisputed facts reveal the following:

Plaintiff's stock is owned solely by American citizens. The "OBSERVER," a vessel owned by plaintiff, was constructed by the joining of the forebody of the "SANTA HELENA" to the stern section of the "TRUSTCO", which joining was accomplished in an American shipyard. The "TRUSTCO" was an American-built vessel owned by plaintiff corporation and enrolled with authority to engage in coastwise trade. The forebody of the "SANTA HELENA" was originally the forebody of the "WAPELLO", an American-built vessel constructed for a Panamanian corporation. The "WAPELLO" was subsequently transferred to a Liberian corporation which severed the vessel's forebody and sold it to another foreign corporation. This last foreign corporation joined the "WAPELLO'S" forebody to the stern section of still another vessel, the result of which was the creation of the "SANTA HELENA".

On October 5, 1966, the Commissioner of Customs, in reply to a request for a ruling as to whether the "OBSERVER" would be eligible for enrollment in coastwise trade found that it would not be so eligible. The Assistant Secretary of the Treasury affirmed the Commissioner's ruling on October 27, 1966, and, on December 19th of the same year, affirmed his prior decision to adhere to the Commissioner's ruling. It is from these rulings that plaintiff seeks relief from this Court.

The requirements that a vessel must meet in order to engage in coastwise trade
*fn1"
are set forth in 46 U.S.C. §§ 11 and 252. Essentially, what is required is that the vessel be built in this country and be wholly owned by citizens of the United States. Section 883 of Title 46 of the United States Code, which is the central cause of dispute herein, in pertinent part provides that a vessel may not engage in coastwise trade unless it is:

"* * * a vessel built in and documented under the laws of the United States and owned by persons who are citizens of the United States, or [is a vessel] * * * to which the privilege of engaging in the coastwise trade is extended by section 13 or 808 of this title: Provided, That no vessel having at any time acquired the lawful right to engage in the coastwise trade, either by virtue of having been built in, or documented under the laws of the United States, and later sold foreign in whole or in part, or placed under foreign registry, shall hereafter acquire the right to engage in the coastwise trade: Provided further, That no vessel of more than five hundred gross tons which has acquired the lawful right to engage in the coastwise trade, by virtue of being built in or documented under the laws of the United States, and which has later been rebuilt, shall have the right thereafter to engage in the coastwise trade, unless the entire rebuilding, including the construction of any major components of the hull or superstructure of the vessel, is effected within the United States, * * *."

The provisos in Section 883 were apparently designed to exclude certain vessels from engaging in coastwise trade. In ruling that the "OBSERVER" was so excluded, the Commissioner relied on the first proviso, finding that the placing of a vessel under foreign registry would thereafter preclude it from acquiring coastwise trading rights. To use the Commissioner's language: "* * * the WAPELLO acquired the right to engage in the coastwise trade by having been built in the United States and lost that right when it was later placed under foreign registry."
*fn2"
In conclusion, the Commissioner noted that when part of a vessel that has lost the right to engage in coastwise trade is used in constructing another vessel, the resulting vessel is likewise ineligible for use in coastwise trade. Hence, because the "OBSERVER" consisted of the forebody of the "WAPELLO", the Commissioner found that it could not be enrolled for coastwise trading privileges.

In affirming the Commissioner's ruling and in response to plaintiff's claim that the first proviso of Section 883 was inapplicable to the "OBSERVER" because the "WAPELLO" had never acquired the right to engage in coastwise trade, the Assistant Secretary of the Treasury stated that the phrase "either by virtue of having been built in, or documented under the laws of the United States" was controlling, as this part of the first proviso reflected Congressional intent to exclude vessels like the "OBSERVER"
*fn3"
from coastwise trade.

The issue, as developed from the record before me, is whether by virtue of any of the provisos of 46 U.S.C. § 883, the "OBSERVER" should be denied the right to enrollment under the flag of the United States.

Plaintiff's position, essentially, is that the "OBSERVER" is not disqualified by virtue of any of the provisos of Section 883 from obtaining coastwise trading privileges. The Government, on the other hand, relies on the previous determinations of the Commissioner of Customs and the Assistant Secretary of the Treasury, and insists that the legislative history of the first proviso of Section 883 clearly mandates the "OBSERVER'S" exclusion from this privilege.

The first proviso of Section 883 begins: "Provided that no vessel having at any time acquired the right to engage in coastwise trade." The clear and inescapable conclusion is that previous acquisition of coastwise trading privileges is a sine qua non to the proviso's application. In order for a vessel to come within its purview it must have once enjoyed the right to engage in coastwise trading and thereafter have been "sold foreign in whole or in part, or placed under foreign registry." The "WAPELLO", which is the vessel claimed by the Commissioner to have once enjoyed coastwise trading privileges, in fact never did. The "WAPELLO" never acquired this privilege since it was never owned by citizens of this country; it was built for and delivered to a foreign corporation. It follows that if the "WAPELLO" does not fall under the axe of the first proviso, it cannot preclude the qualification of the "OBSERVER" for enrollment in coastwise trade.

The Government, contending that such a construction is inconsistent with the purpose as expressed in the history of the first proviso, has urged this Court to adopt a construction more consonant with legislative intent. But even assuming the validity of the Government's premise, since I do not find the proviso in question unclear it is wise to abide by the elementary rule of statutory construction that absent ambiguity a statute should be controlled by its literal language, without resort to legislative history. United States v. Missouri Pac. R.R., 278 U.S. 269, 278, 49 S. Ct. 133, 73 L. Ed. 322 (1929); Elm City Broadcasting Corp. v. United States, 98 ...

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